Are your workers grateful for the benefits you provide to
them--or are growing numbers of them seething over perceived
inequities that give the lion's share of benefit dollars to a
minority in the workplace? If you think the grumpiness is on the
rise, you're right. But the surprising news is that the
minority pointed to as receiving too many benefits are workers with
children. And a startling 56 percent of companies polled by The
Conference Board, a New York City-based research organization, say
that childless employees resent the benefits provided to employees
with children.

Robert McGarvey writes on business, psychology and management
topics for several national publications. To reach him online with
your questions or ideas, e-mail rjmcgarvey@aol.com

Minority Rules

Are employees with children in fact a minority? Best estimates
are that they amount to only one-third of the work force, but
that's a statistic arrived at by narrowing the definition to
include only minor children (kids under 18). While many baby
boomers have kids, a lot of them are now college-age or older,
putting their parents back into the "childless" group,
according to the stats.

Are the childless right that many benefits programs favor
employees with kids? In large, multinational corporations, there is
little dispute. Many benefits are for workers with kids
exclusively--child-care subsidies are an examble. Evidence is
strong that other programs primarily appeal to workers with
kids--flextime is a case in point, as is telecommuting. But even in
businesses that lack the extensive benefits programs of the
corporate giants, there is typically some favoritism shown to those
with children. For example, even when employees must contribute
toward medical coverage for dependents, most businesses underwrite
at least some of the cost--and 42 percent of the companies surveyed
by The Conference Board conceded that childless employees subsidize
the health-care costs of workers with families.

Remember, too, that it's not just formal benefits that are
at issue. Just as much anger arises over informal benefits--such as
giving workers with children days off when kids are sick and rarely
expecting weekend work or overtime from workers with kids.

According to Mary Young, a workplace researcher at the Boston
University School of Management, "Organizations have
inadvertently created two classes: the haves and the have nots.
Life status--whether or not you have kids--has become a dividing
line. It sets employee against employee for prized but limited
resources. That's created divisiveness in the work force. It
stirs up a lot of dust, and it creates a lot of envy and
anger."

Balancing The Scales

How is an employer supposed to deal with this divisiveness?
Survey the experts, and the advice is plentiful--and diverse. For
starters, Ed Lawler, director of the Center for Effective
Organizations at the University of Southern California in Los
Angeles, says there is a quick cure: Pare benefits to the bone.
"My advice to entrepreneurs is always to provide lean
benefits," says Lawler. That means lower costs for you, plus
you want to attract workers who are excited about your business,
not your benefits."

Besides, Lawler adds, most workers fail to value benefits at the
true costs paid by employers. "Every dollar you spend on
benefits gets you about 70 cents in perceived value; that's the
rule of thumb," he says. "Many of the entrepreneurs I
consult for say that benefits provided by big corporations are why
those companies are at a competitive disadvantage--and by not
providing them, the entrepreneur gains a real competitive
advantage."

Sound extreme? While minimizing benefits would put an abrupt
halt to squabbling between the childless and workers with families,
many businesses would hesitate to take this step, and for good
reason. At least a skeletal menu of benefits is offered by most
employers: "Medical, life and disability insurance are the
basic coverages," says Henry Moyer, a partner at Hirschfeld,
Stern, Moyer & Ross, a New York City benefits consulting and
brokerage firm. Most employees won't work for an employer who
doesn't provide at least these essentials.

So how can the inequity issue be resolved? Fiddling with the
present setup may remove many inequities. One large step: Put an
end to ad hoc decisions about employee requests for days off by
setting up a "time-off bank" that lumps together sick
days, personal days and vacations. Workers who need time off,
whether to care for a sick child or an ailing cockatoo, can take
the day off by withdrawing from his or her account.

"This idea is growing in popularity at many
businesses," says Young. "It eliminates the need for a
worker to go through a song and dance to get a day off. And it
takes bosses out of the business of deciding which worker's
requests should be granted or denied."

How many days should you put in each worker's account?
That's up to you. But, says Young, "Make sure workers get
the same number of days, regardless of life status."

Another cure: If you offer flextime, make it available on an
equal basis. Ditto for telecommuting. If workers choose not to use
these options, that's their choice; there's no room for
blaming those who do.

One way to erase inequities is to replace existing benefit plans
with cafeteria plans that grant workers latitude in the benefits
they get. "Cafeteria plans are tremendous tools. People have
different needs at different stages of their lives, and a cafeteria
plan allows them to put money into what they need now," says
Art Bachman, an attorney specializing in employee benefits with
Blank, Rome, Comisky & McCauley, a Philadelphia law firm.

Cafeteria plans work like this: Each employee is generally given
a fixed amount to spend on benefits of his or her choice. Cafeteria
menus run the gamut from typical benefits--medical, dental and life
insurance--through child-care reimbursement, even coverage of
health or dental deductibles. What about employees who want no
benefits? Many cafeteria plans require that some benefits be bought
(medical insurance, most often), but most allow employees to put
into their own pockets any dollars that aren't spent (although
at that point, the money is taxed as ordinary income).

Sound fair? It does to many employees, and, for employers,
pluses include silencing complaints about inequality and putting
benefits dollars to more effective use: "A cafeteria plan lets
employees put money where they want it, so they value their
benefits more. That means the employer isn't wasting money on
benefits employees don't want," says Bachman.

Tasty as cafeteria plans seem, there is a hitch. "These
programs are difficult and time-consuming to administer," says
Moyer. Legal pitfalls are plentiful, and missteps in setting up a
plan can void any tax benefits and expose employers to legal
liabilities. If you're considering this option, close
consultation with a benefits professional or attorney is crucial.
In truth, while cafeteria plans are much talked about,
implementation has been scant. "No more than 20 percent of our
clients have delved into cafeteria plans in a big way," says
Moyer.

Aren't these companies worried about perceived imbalances?
"Frankly, not many of my clients are very concerned with the
inequities that are often part of standard plans," adds Moyer.
"These complaints have always been around. They might be a
little louder today, but we've heard similar complaints for
many years."

By all means, if many of your employees are howling about
inequities in your benefits plans, take a hard look at applying
patches that soothe at least some of the resentments--set up a
"time-off" bank, for instance. But another response is
simply to point to the federal tax code: "It has many built-in
`inequities' and offers benefits to those with children,"
says Alex Chernoff, a managing partner with Albertson, New York,
benefits advisory firm Chernoff Diamond and Co. She adds:
"It's not difficult to create a system that treats
everyone equally. But sometimes we should treat people equitably,
not necessarily equally."